Tag Archives: advancement

Chancery Grants Advancement, Rejects Common Defense

For those readers who follow the many Chancery decisions highlighted on these pages regarding advancement for corporate officers and directors, the recent Court of Chancery decision in Nielsen v. EBTH Inc., C.A. No. 2019-0164-MTZ (Del. Ch. Sept. 30, 2019), can be added to the long line of cases that reject an argument that the requirement … Continue Reading

Advancement Granted for Post-Termination Use of Confidential Information

The recent Delaware Chancery Court opinion in Ephrat v. medCPU, Inc., C.A. No. 2018-0052-MTZ (Del. Ch. June 26, 2019), remains noteworthy for two reasons, notwithstanding the large number of advancement decisions interpreting DGCL Section 145 appearing on these pages over the last 14 years: (1)        It provides an anthology of prior Delaware decisions granting advancement … Continue Reading

Chancery Advancement Ruling Recites Basic Principles and Nuances

Adding to the multitude of Delaware decisions featured on these pages involving the right of corporate directors and officers to advancement of their fees incurred to defend claims against them, pursuant to DGCL Section 145, or by agreement, we offer highlights of Sider v. Hertz Global Holdings, C.A. No. 2019-0237-KSJM, Order (Del. Ch. June 17, 2019), a … Continue Reading

Mid-Year Review of Key Delaware Corporate and Commercial Decisions

Over the last 14 years that I have published this blog, I have compiled an annual review with a list of key Delaware corporate and commercial decisions that have widespread utility to practitioners, especially those court decisions that are not widely covered by other legal publications or the mainstream press. On a few occasions, I have prepared a mid-year … Continue Reading

Chancery Orders Mandatory Indemnification per DGCL Section 145(c)

A recent Delaware Court of Chancery decision ordered mandatory indemnification based on success in underlying litigation pursuant to DGCL § 145(c), in the matter styled:  Brown v. Rite Aid Corporation, C.A. No. 2017-0480-MTZ (Del. Ch. May 24, 2019). Issue Addressed:  Whether dismissal of the underlying litigation based on a technical argument was “success” for purposes of … Continue Reading

Chancery Grants Advancement on Counterclaims

A recent Delaware Court of Chancery bench ruling granted advancement in connection with defensive counterclaims against a former officer and director.  In Dodelson v. AC Hold Co., Inc., C.A. No. 2019-0029-SG (transcript) (Del. Ch. May 21, 2019), the court interpreted the provisions of a charter with advancement provisions, and reasoned that advancement was warranted. An … Continue Reading

Chancery Denies Indemnification Claim Seeking Recoupment of Advancement

A recent Court of Chancery decision rejected an attempt to recoup advancement based on the terms of an indemnification clause. See Computer Sciences Corporation v. Pulier, C.A. No. 11011-CB (Del. Ch. May 21, 2019), for this recurring issue in Delaware corporate and commercial litigation. Issue Addressed:  May a company recoup, via an indemnification claim, the amounts … Continue Reading

Chancery Applies Corporate Advancement Case Law to LLC Context

A recent Delaware Court of Chancery decision interpreted the advancement provisions of an LLC Agreement by applying case law interpreting DGCL Section 145 in the corporate context.  In Freeman Family LLC v. Park Avenue Landing LLC, C.A. No. 2018-0683-TMR (Del. Ch. Apr. 30, 2019), the court reviewed the applicability of “defined phrases” that are familiar … Continue Reading

Advancement for Counterclaims Granted, With Success Fee, Despite Withdraw of Covered Claim

A recent transcript ruling by the Delaware Court of Chancery in Gasgarth v. TVP Investments, LLC, C.A. No. 2018-0621-JTL, (transcript ruling)(Del. Ch. Dec. 7, 2018), explained that the right to advancement was not extinguished by an amendment of a counterclaim to specifically withdraw breaches of fiduciary duty counterclaims and remove factual allegations relating to the … Continue Reading

Chancery Applies Fitracks Procedures to Challenged Advancement Award

Last month, in a comprehensive advancement decision captioned White v. Curo Texas Holdings, LLC, C.A. No. 12369-VCL (Del. Ch. Feb. 21, 2017), the Delaware Court of Chancery applied what has become known in Delaware as the “Fitracks Procedures” to determine the appropriate amount of an advancement award when the exact amount of fees for covered … Continue Reading

Chancery Issues Additional Advancement and Indemnification Rulings in Quiznos Restructuring

An Eckert Seamans associate prepared this overview. The Court of Chancery issued two opinions relating to a web of advancement and indemnification claims brought on behalf of multiple, separate plaintiffs: (1) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Jan. 9, 2017); and (2) Meyers v. Quiz-Dia LLC, C.A. No. 9878-VCL (Del. Ch. Jan. … Continue Reading

Chancery Denies Claim For Advancement and Indemnification From Successor Entity

Grace v. Ashbridge LLC, C.A. No. 8348-VCN (Del. Ch. Dec. 31, 2013). Issue Addressed:  Whether a successor entity was liable for advancement and indemnification claims based on the operating agreement of a successor entity LLC even though the sole allegations involve a predecessor entity and a related entity. Short Answer:  No. Brief Overview:  An understanding … Continue Reading

Chancery Denies Advancement Claim

Emerging Growth Fund, L.P. v. Figlus, C.A. No. 7936-VCP (Del. Ch. Mar. 28, 2013). This Chancery opinion denies a claim for advancement which was made as part of and in the context of a motion for a preliminary injunction to enforce the terms of the parties’ partnership agreement. Applying basic contract interpretation principles, the court found that the … Continue Reading

Chancery Addresses Default Fiduciary Duties in LLC and Advancement Issues

Zimmerman v. Crothall, C.A. No. 6001-VCP (Del. Ch. Jan. 31, 2013) Issue Presented  This 74-page opinion addresses the allegations of a minority unitholder in an LLC who asserts claims that the directors breached their fiduciary duties in connection with several financing transactions. Brief Overview  Zimmerman claimed that the challenged transactions should be analyzed under the … Continue Reading

Key Delaware Corporate and Commercial Decisions in First 4 Months of 2012

The following key Delaware corporate and commercial decisions from the first four months of 2012 are a follow-up to our summary of the key decisions that we featured from 2011. We highlight on these pages all the corporate and commercial opinions from Delaware’s Supreme Court and Court of Chancery, and we have chosen the following 2012 rulings … Continue Reading

ABA Panel Presentation on D&O Liability, Advancement and Indemnification

Kevin F. Brady and Francis G.X. Pileggi were part of a panel presentation entitled:  “Protecting the Corporate Director” at the American Bar Association’s Business Law Section Spring Meeting at Caesars Palace in Las Vegas last month.  The focus of the panel was on director and officer liability, as well as indemnification and advancement, including insurance … Continue Reading

Court Awards Fees for Advancement and Indemnification and Establishes Protocol for Future Advancement Requests

The Court of Chancery in Danenberg v. Fitracks, C.A. No. 6454-VCL (Mar. 5, 2012), addressed important issues of advancement and indemnification. After the parties met and conferred but failed to reach any agreement as to amounts, the Court on March 5, 2012, awarded $292,019.91 to petitioner Noam Danenberg as advancement from respondent Fitracks, Inc. in connection with his … Continue Reading

Indemnification and Advancement Issue of First Impression Decided by Chancery

Hermelin v. K-V Pharmaceutical Company, C.A. No. 6936-VCG (Del. Ch., Feb. 7, 2012). Issues Addressed The Court of Chancery addressed an issue of first impression in Delaware regarding: “what evidence is relevant to an inquiry into whether an indemnitee acted in good faith for the purposes of permissive indemnification” under DGCL §§145(a) and (b). The Court also addressed: (1) Whether … Continue Reading

Chancery Court Modifies Advancement Award Based on Changed Circumstances

Duthie v. CorSolutions Medical, Inc., et al., No. 3048-VCN (Del. Ch., June 16, 2009), read opinion here.  A prior Chancery Court decision in this advancement case, which also provides more background facts,  has been summarized on this blog here.   Overview This Chancery Court decision discusses in detail the conceptual and public policy basis for an important aspect … Continue Reading
LexBlog